The Labour Party said New Zealand should be embarrassed by the high number of children living in poverty.

Its spokesperson on children, Jacinda Ardern, said child poverty had gone down because of the end of the global recession, not policy.

"I don't think the government could name one thing that they have done to reduce child poverty."

Ms Ardern said the government had had plenty of time to implement changes, but had failed to do so.

A 'matter of urgency'

The report, released today by Children's Commissioner Russell Wills, found that of the 260,000 found to be in poverty, 37 percent came from working families.

Children's Commissioner Dr Russell Wills. Photo: SUPPLIED

Dr Wills said while the fall in the numbers since the last report was encouraging he was worried that more than 110,000 children were living in the hardest end of poverty.

"Any action to reduce child poverty needs to focus on these children as a matter of urgency," he said.

The report also found 180,000 children were going without basics such as fresh fruit and vegetables, a warm house or decent clothing.

Three out of five children living in poverty will live this way for much of their childhood, it said.

The report also showed 43 percent of children in the poorest areas of New Zealand were living in a crowded home, and that children in poor communities were three times more likely to end up in hospital.

Prime Minister John Key has made a commitment to make child poverty a priority this government term and Dr Wills hoped the Child Poverty Monitor may help with policy.

"Children are not statistics. We know that. But when you want to track progress on child poverty over time, you have to use numbers," he said.

Dr Wills told Morning Report the "ad hoc, piecemeal' approach should end and the government needed a plan in which the youngest, most vulnerable children are prioritised. The tax and benefit system should be looked at as one way to increase incomes.